When should I invest?


Hi Fpguru,

First of all I must tell u that I found your website very informative and instructive. I am a SYBFM student and would like to start investing.

I save around 5k a month and have thought about investing in mutual funds. My time horizon is 3-5yrs. What I would like to ask you is that is there a specific time when I should invest in a mutual fund, like for example should I invest when the NAV is low? Please advise me how to initiate my investments!



Dear Bonny,

We thank you for visiting our website. It’s nice to see you have started saving at this young age. If you invest your savings in the right instruments for the long term, you will be able to achieve most of your financial goals.

The time horizon you have mentioned for your investment is 3-5 years. For this period we suggest you to invest in an Equity Balanced mutual fund of a reputed fund house. For e.g. HDFC Balanced Fund, DSP BR Balanced fund, etc under the growth option. This will give you the best balance of risk & return for the said period.

Your second query about timing of the investment is very important. It is a fact accepted by most investment guru’s that time, not timing is the recipe to success of an investment. You need not worry when the NAV is less or more as these are just random predictions which may or may not work. Then how can you ensure you get the best average cost of purchasing? Well the method of Rupee cost averaging or simply SIP (Systematic Investment Plan) is the answer. You invest a fixed amount every month over a period of time & you will slowly but steadily get a decent average NAV of your MF investments. This is the best way to invest in the long run. You will basically diversify your purchases over a period of time.

Hope this solves you query!


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